Healthy Food, K-Food to Go Global
When the Park Geun-hye administration was campaigning, one of their major platforms was the development of a “creative economy” within Korea.
Now that this administration has taken office, many are curious as to the state of the development of the creative economy, and the government’s plans moving forward. Korea IT Times recently sat down with the Minister of the Ministry of Agriculture, Food, and Rural Affairs, Lee Dong Phil to discuss a number of issues related to the creative economy, and the contributions that will be made from the agricultural sector.
The new government administration came into power this year. One of its main campaign pledges was promoting a “creative economy.” If the Ministry of Agriculture, Food and Rural Affairs is to accomplish the creative economy, what is required?
The ways to graft, if you will, a creative economy into the fields of agriculture, food, and rural affairs are to integrate science technology into traditional agriculture from both a narrow and broader perspective. It is imperative that steps are taken to integrate the agricultural sector with the manufacturing and service industries. To elaborate, the process required to integrate science technology into traditional agriculture involves strengthening the competitiveness of the agriculture and food industry and creating newly added value in new markets by utilizing IT, BT, and NT. For example, 80 kg of regular rice currently costs around 180,000 KRW. However, rice that demonstrates the ability to prevent hyperlipidemia by inoculating red aspergillum is currently being exported to Japan for 800,000,000 KRW per 80kg.
Furthermore, developing agriculture into the 6th degree of industry will be done by connecting the agriculture industry (1st degree) with distribution and processing industry (2nd degree) as well as the food and tourism industry (3rd degree) to create the power of growth in a variety of agricultural regions. To implement this strategy, we plan to provide new and expand current education and financial support for farmers to allow them entry into the food processing business, as well as put deregulations into place in terms of small food manufacturing facilities for traditional food and other related materials. Finally, we plan to revitalize agriculture tourism through the evolution of the agricultural industry into the 6th degree of industry.
Ultimately, the creative economy will come to fruition with an increase from 700 current agricultural experience villages to 800 villages, implementing a rating system for agriculture tourism industry (March), and selecting school that specialize in agriculture (50 schools).
The food industry has recently been garnering a lot of attention as a market with a plethora of new values to be added. What are the specific methods and plans from our government to foster the food industry?
We plan to set up and expand various methods that will allow farmers to enter the food process business and distribution field. For example, if a farmer wishes to enter into a simple process business, such as pear juice or any other fruit juice, the farmer would benefit from first visiting a regional “joint process center” (12 centers in 2012 à 18 centers in 2017) to learn about the food processing industry and produce some samples to sell. We have set a precedent in Mungyeong, Kyungbook, where the revenue of the Maximowiczia fruit, was increased from 4 billion KRW in 2006, to 89.5 billion KRW in 2012 because of the heightened processing products and related tourism. Specifically, the processed Maximowiczia’s revenue increased from 100 million KRW to 40 billion KRW, a whopping 400% increase.
Another example is the potential for the formation of a strategic alliance with processing companies, universities, research institutes, and local governments to allow a group of farmers looking to process regional products in conjunction with one another to achieve their desired goal. Farmers currently have different ways to enter the food processing industry, including “Regional Food Cluster” agencies (67 agencies) and “Farmers, Manufacturers, and Tradesman United Companies” (about 300). We also plan to increase policy support for the farmers to make this a reality.
On top of the aforementioned plans, we also plan to increase the support provided to small & medium sized businesses to promote the continual growth of the food industry. R&D investment (31.8 billion KRW in 2013) with respect to small & medium businesses and training of food industry professionals will continue to rise, and a joint marketing system or joint product development among small & medium enterprises will be implemented and financially supported with 5.1 billion KRW.
Finally, we plan to organize a national food cluster (encompassing a land size of 2,320,000 m2 from Iksan, Junbook by 2015), where international and domestic companies can participate. As of May, , 67 international and domestic companies have signed MOU’s. This complex will focus on exporting domestic products with high quality technologies and help companies develop an extensive network in cooperation with various research institutions.
What are the specific policies in terms of globalizing Korean agricultural food and increasing the exportation of such food?
Along with the diversification of potential export markets throughout the world, we are pushing for various support and businesses, including improving the competitiveness of exporting companies as well as their advertisement and marketing abilities. We are hopeful that this will ease the transition for Korean agricultural food to enter the global market. In order to generate such exporting market diversification, we plan to implement systematic exporting marketing support (overseas market research à product localization à market testing à distributor connection), operate Antenna Shop (temporary Shop-in-shop) to colonize new markets (Russia, Central & South America, etc.), and conduct informational research (current market status, customers’ preference, etc.) on export strategies specific for each exporting countries.
Plus, to increase the competitiveness of exporting companies, we will set up a joint logistic business to mitigate the cost of shipping, air freight fees, and logistics, operate a common logistic center overseas to secure the necessary infrastructure, develop optional exchange rate insurance, and provide loan support for capital investment.
Finally, to provide strategically sound marketing, we plan to operate a K-FOOD Fair, which will include exportation consultation for customers looking to secure entry promising new market such as Chinese regions and ASEAN, participation various international food exhibitions, and extend an invitation to numerous potential buyers with the lure of special events.
Is there any precedent of successful integration of IT and agricultural food, and what is the current export status?
Two success stories immediately come to my mind, one about paprika farming and the other about tangerines. In the case of paprika, IT was used to generate an environmental control system, and for tangerines, IT was used to establish a production traceability system. The U-IT Environmental Control System for paprika automatically measures and manages the temperature and humidity of the greenhouse. This paprika management system can be checked in real time on the Internet, and as a result, the system is making a significant contribution to enhancing the high quality production of paprika. A joint export association of paprika called KOPA implemented this system throughout 28 farms in 2012 and KOPA achieved more than $89 million in export revenues in 2012.
The production traceability system for tangerines manages the production related information, such as pesticide injection information, and such information is updated and can be checked by importing countries through a mobile application. Not only that, we are also expanding the usage of IT technology by implementing an agricultural trade website called Agrotrade to provide useful and vital information, including a list of foreign distributors and potential buyers for exporting companies in real time.
Any plans to hold international agricultural food related events or exhibitions this year?
We are planning to organize the 2013 K-FOOD Fair for international and domestic agricultural food related companies. The main purpose of the exhibition is to explore the frontier of new global markets and expand current knowledge and trends with respect to Korean agricultural food. The companies and participants will be able to gain hands on experience, export consultation, and ample marketing opportunities. We will invite numerous potential buyers to attend, and in conjunction with strong marketing, we hope to enhance foreign buyers’ preference and awareness regarding Korean agricultural food.
The schedule of the fair has already been set to hold 4 exhibitions: Shanghai in June, Hanoi, Vietnam in September, New York/LA, USA, in October, and Hong Kong in November. The 2013 K-FOOD Fair in Shanghai will focus on gaining a foothold in the markets in Southwest China and will feature a new concept of combining B2B export consultation (June 26 ~ 27) as well as B2C Hands on Event (June 28 ~ 29). We also plan to participate in other international food exhibitions in New York and Cologne, Germany, and develop a Korean food section, so that domestic food companies are provided with an opportunity to explore new potential buyers.